Trump’s new tariffs come into effect today
On Wednesday, August 27, the Trump administration imposed extra 25% tariffs on 66% of India’s $86.5 billion in exports to the United States. A think-tank analysis claims that this new tax, which will impose tariffs of up to 50% on items valued at $60.2 billion, is likely to cause economic disruption in India.
According to the report, labor-intensive industries like textiles, jewelry and gems, and shrimp farming could see a 70% drop in exports, endangering millions of jobs in cities like Tiruppur, Surat, Visakhapatnam, and Mumbai.
It points out that although $27.6 billion in US exports, mostly electronics and medicines, are still duty-free, nations like China, Vietnam, and Mexico are positioned to take a sizable portion of India’s market.
Indian exports are predicted to be severely disrupted by the United States’ new tariff regime, which will go into effect on August 27, 2025, with labor-intensive sectors likely to be the most affected, according to a recent analysis by the Global Trade Research Initiative (GTRI).
The research provides a data-driven analysis of the sectoral effects, pointing out that policy changes, India’s expanding services industry, and its diverse export base may all help lessen the impact.
According to a recent research by the Global Trade Research Initiative (GTRI), the United States’ new tariff regime, which will take effect on August 27, 2025, is expected to significantly disrupt Indian exports, with labor-intensive sectors likely to be the most affected.
The study offers a data-driven examination of the sectoral implications, highlighting the potential mitigation of the consequences through policy reforms, India’s growing services sector, and its varied export base.
Goods subject to a 25% tariff
In 2024, India’s auto component exports to the US totaled $6.6 billion. About $3.4 billion of goods, mostly auto and small truck parts, will be subject to a 25% levy. The study states that the greater 50% duty will be applied on the remaining $3.2 billion.
The think tank cautions that this tariff shock might undermine India’s place in global value chains, trigger widespread layoffs in export hubs, and impair India’s historical competitiveness in US markets.
China, Vietnam, Mexico, Turkey, and even smaller countries like Pakistan, Nepal, Guatemala, and Kenya, on the other hand, are in a position to regain the market share that India has lost.
